Correlation Between Far EasTone and EirGenix
Can any of the company-specific risk be diversified away by investing in both Far EasTone and EirGenix at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Far EasTone and EirGenix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Far EasTone Telecommunications and EirGenix, you can compare the effects of market volatilities on Far EasTone and EirGenix and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Far EasTone with a short position of EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Far EasTone and EirGenix.
Diversification Opportunities for Far EasTone and EirGenix
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Far and EirGenix is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Far EasTone Telecommunications and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix and Far EasTone is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Far EasTone Telecommunications are associated (or correlated) with EirGenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EirGenix has no effect on the direction of Far EasTone i.e., Far EasTone and EirGenix go up and down completely randomly.
Pair Corralation between Far EasTone and EirGenix
Assuming the 90 days trading horizon Far EasTone Telecommunications is expected to generate 0.51 times more return on investment than EirGenix. However, Far EasTone Telecommunications is 1.97 times less risky than EirGenix. It trades about 0.07 of its potential returns per unit of risk. EirGenix is currently generating about -0.04 per unit of risk. If you would invest 6,750 in Far EasTone Telecommunications on August 29, 2024 and sell it today you would earn a total of 2,420 from holding Far EasTone Telecommunications or generate 35.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Far EasTone Telecommunications vs. EirGenix
Performance |
| Timeline |
| Far EasTone Telecomm |
| EirGenix |
Far EasTone and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Far EasTone and EirGenix
The main advantage of trading using opposite Far EasTone and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Far EasTone position performs unexpectedly, EirGenix can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EirGenix will offset losses from the drop in EirGenix's long position.| Far EasTone vs. Taiwan Mobile Co | Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. President Chain Store | Far EasTone vs. Formosa Petrochemical Corp |
| EirGenix vs. Elan Microelectronics Corp | EirGenix vs. Oceanic Beverages Co | EirGenix vs. Ambassador Hotel | EirGenix vs. Chung Lien Transportation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance |